tv Nightly Business Report PBS January 12, 2011 12:30am-1:00am EST
>> two industry innovators are coming together to deliver something that customers have really been hungry for for years. >> tom: verizon and apple finally team up, and the new partnership could mean a big boost in sales. >> susie: coming up, our interview with verizon president lowell mcadam. you're watching "nightly business report" for tuesday, january 11. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. well, move over at&t. verizon announced today it will begin selling apple's popular iphone. tom, this ends ma bell's exclusive rights as iphone's sole carrier. >> tom: susie, a lot of people have been waiting for this, especially with so many complaints about dropped calls on the at&t network. a recent j.d. power survey put at&t last among the major wireless carriers for call quality in four of six national regions. starting february 3, existing verizon wireless customers will
be able to buy the iphone 4. then on february 10, the verizon iphone will launch to the public in apple and verizon stores and online. the cheapest version will sell for $199. >> susie: the question of when verizon would sell apple's iphone has been a hot topic for years. today, when i talked with verizon president lowell mcadam, i asked him "what took so long"? >> i think i said three years ago that eventually our business interests would align, and it just took a little bit more time. i think apple did exactly the right thing when they launched on gsm, but one skew they could deploy all over the world. i think what changed is we saw tremendous demand from those costumers to be on the verizon wireless network, and it made sense to both of us. and once we got over technical hurtles, it didn't take long. >> susan: so, lowell, is the verizon network ready to handle all of the traffic. >> absolutely.
over the past few months, we have added millions and millions of costumers to or droid phones. the droid phone uses almost twice the amount that an iphone use. our guys are ready. we're going to be just fine. >> susie: at&t said the same thing, but they were surprised every step of the way in trying to meet up with demands. >> our drop call rate has been below 2%, over the last 10 years. costumers have come to rely on that. we understand. we're staking our reputation here, and we have put our money where our mouth is. >> susie: so how many people from at&t will defect and come to you? >> well, we'll take every one that does, how about that? i think the costumers early experience will matter a lot, and based on the thousands of phones we've had doing testing, i think they're going to have a great experience. we'll take every one. >> susie: what do you say to the criticism that someone can't be on their cell phone and at the same time send an e-mail.
>> when you talk to iphone costumers, they don't ask about that. they ask one question: when can we get the iphone on verizon. and that's what i think we need to focus on. >> susie: what happens to verizon's android, does it take a back seat? >> no, not at all. we have two of the strongest platforms. and we'll continue to have blackberry and the iphone. >> susie: everyone is talking about having a cell phone that uses the super fast 4g network. what is the timeline for that happening? >> with apple -- we're not ready to announce anything with apple. but it is something we talk about. we talked today about this being a strategic partnership. it is not just buying a phone. it is about aligning our road maps in the future. we'll have one and announce it when we get there. >> susie: there has been a lot of hoopla about today's announcement. but will it lead to bigger
profits for versus -- verizon. >> these costumers are $100 costumers. here is a great opportunity for us to increase our share of smart phones and help the bottom line. >> susan: do you think the iphone will do more for verizon's stock? >> i think there is room in the stock from lots of places. as we get more effective at penetrating buyouts, as we sell more and the enterprise customer as the economy continues to improve. everything we do as a business drives the stock price. i think this will be one of them. >> susie: i understand you got your own iphone? >> i do. >> susie: what do you think about it? >> it's great. i've been using the ipad for a long time. it is so easy to use. it has the same kinds of capabilities and a great network to go with it. i think this is going to be a huge hit. >> susie: lowell, best of luck to you. >> thank you so much, susie.
i appreciate it. >> tom: here are the stories in tonight's "n.b.r. newswheel." an easing of worries about european debt helped u.s. stocks higher-- the dow rose 34 points, the nasdaq added nine, and the s&p 500 was up four. trading volume-- about the same as yesterday on both the big board and the nasdaq. portugal's prime minister said his nation will not need a bailout and won't ask for one. that's despite being prodded to do so by other european nations. the trans-alaskan pipeline is still out of service. it's the fourth day the pipeline's been down. it normally carries half a million barrels of oil a day. oil prices topped $91 a barrel, closing up $1.86 at $91.11 in new york trading. and the presidential commission investigating the gulf oil spill disaster released its final recommendations today. it says the oil industry, congress and the white house all need to do more to prevent another disaster. the panel came up with 15 ideas to head off another spill, from bigger budgets and bigger penalties to better training. >> reporter: i'm diane
eastabrook. coming up, some of the hits and misses at the north american international auto show in detroit. >> susie: how do you grow jobs and bring down the nation's unemployment rate? the u.s. chamber of commerce is on a mission to get jobs for out-of-work americans. it says more free trade agreements are needed to promote exports, rebuild roads, and reduce deficits. and it's campaigning for one other controversial idea-- cutting back on regulation. darren gersh reports. >> reporter: with the house of representatives now in republican hands, u.s. chamber of commerce c.e.o. tom donohue worries the obama administration will increasingly use its regulatory powers to get things done. >> the resulting regulatory tsunami poses, in our view, the single biggest challenge to jobs, our global competitiveness, and the future of american enterprise. >> reporter: the first wave of regulation donohue aims to roll
back is the president's health care reform. next on his list are new financial, environmental and workplace regulations. but even as donohue was speaking, across town, the presidential oil spill commission issued a stark reminder of the cost of too little regulation. commission co-chair senator bob graham said lax enforcement was partly to blame for the b.p. oil spill. >> our regulators were consistently outmatched. the department of the interior lacked the in-house expertise to effectively enforce regulations. >> reporter: at the economic policy institute, economist lawrence mishel says polls show business owners are worried about lack of demand, not too much regulation. and, mishel adds, when it comes to financial regulation, the goal is to prevent another great recession. >> it was the lack of financial regulation that got us into this recession to begin with. for people to invoke that we don't have jobs because of
regulation-- they're the ones who have to answer for why we are 10 million, 12 million jobs in the hole right now. >> reporter: but donohue argues regulatory delays and over- reactions have cost many americans their jobs. and in the case of the gulf of mexico spill, he says regulators have essentially shut down american oilxploration. >> i think they should improve the competence of the regulators, i think they should look at things we ought to do better. but i don't think they should walk around for five years talking about it while we're not drilling for oil and the price of gas is going up. >> reporter: regulation is sure to be a key political battleground in the coming year, and the obama administration is already considering removing some regulatory hurdles to show it is not anti-business. darren gersh, "nightly business report," washington. >> tom: meanwhile, one new governor vows to cut regulations and taxes while creating jobs. florida's new governor, rick scott, inherits a state been hit by the banking crisis, the housing collapse, and now one of the highest unemployment rates in the country.
governor scott says he'll run the government like a business. we caught up with him today, and began by asking how he'll do that. >> truthly, great businesses are measured on how they take care of their costumers. companies that do a good job of taking care of their costumers, measure that constantly, those are the companies that do well. we're going to do the same thing. >> tom: let's talk about job creation. what industries do you see as most poised for job creation that your policies can assist? >> sure. government is in a position where they can pick winners and losers. what government can do is make it a conducive place to do business. we're the number one destination for tourists in the world. that's going to continue to grow. i'm going to do everything i can to help them. the second biggest economy is agriculture. so i'll work on that. all of the others, including the military -- i'll work with them. but all of the others make it to where the people want to do business here. that's don't have regulations that kill jobs. don't have taxes that kill
jobs. so in -- and have a government that works with business people. >> you mentioned tourism. you mentioned the military. you mentioned agriculture. as measured as a contributor to g.d.p., construction and real at&t is 25% of the state's gross domestic product. clearly this has been the epicenter of home foreclosures and the construction boom gone bust. are there state policies that you're going to be pushing that is going to attract construction, both residential and commercial, and help reinvigorate the real estate market? >> sure. firsfirst -- first off, i'm going to build jobs. the only way to turn around the mortgage crisis is we have to build jobs. i've already met with foreign ministers and councils about doing trade missions. i'm going to look at all of the permitting that is slowing down some construction projects and deal with that. florida, for the first
time in better than a generation, has actually seen people move out. seen net decrease in its population. how do you stem that tide to continue to attract and grow the florida economy, which had been so vibrant up until this housing and credit crunch. >> what you do is focus on every day. look, we're competing with 49 other states. we're going to make this the state that people want to open their businesses. that's going to be the first thing. and we're also competing with some other countries. we have to look at what everyone else is doing. i always tell people, i see rick perry in texas, doing a great job of job creation. i say whatever he did well, we've got to do a little better. so people don't have an economic reason to move there. >> meantime, the state faces a $3 billion budget hole, which is something much more significant. it comes at a time again with your pledge to cut property taxes, cut corporate income taxes, business taxes, and a pledge to remain income
tax-free for the individual. is that correct? >> that's correct. >> as you are continuing to attack the revenue side of the ledger, where does the revenue come from to help fill that hole? >> we get enough revenue in this state. what we have to do in our state budget is watch how we spend it. i'm going through every agency, every line item, saying should we be spending that money? >> how much do you anticipate reducing the size of the state spending in the budget? >> we clearly have to reduce it by $3.5 billion. >> florida governor rick scott. thank you so much, governor. >> thank you.
>> susie: so, tom, modest gains in the market, as you reported a few moments ago. and what is keeping investors on the sidelines, they're waiting for the earnings reports to hear what companies are saying about the outlook for business. >> tom: we talked a lot of about the alcoa earnings with the c.e.o., and we're in the lull period in the weeks ahead. nonetheless, still plenty to talk about tonight. let's get everybody updated in tonight's "market focus." [bell ringing] some modest gains today ahead of an expected snowstorm in the northeast tomorrow, and an auction of european government debt giving investors a real- time indication of potential problems there. the energy sector led the way higher with a deepwater drilling equipment maker and coal miner at the top of the pack.
cameron international added 6% today. it made the blow-out preventer that failed in april, leading to the gulf oil disaster. just before the disaster, cameron stock was at $47. over $51 today. the full government report on the disaster was released today as we mentioned earlier. other companies involved in the disaster also saw stock buying. b.p. added almost 2%. anadarko petroleum, transocean, and halliburton were each up more than 3%. coal stocks were hot, as coal production is growing and wall street gets more bullish about coal. consol energy popped almost 4%, rallying to its highest price since march. tonight, it's within about two dollars of a new 52-week high. coal production last quarter was the highest of the year. it wasn't alone, though.
check out this move patriot coal has seen. this is a 30-session chart, but just since the first of the year, patriot is up more than 30%. let's roll out the one-year chart with shares hitting new 52-week highs. deutsche bank calls it a buy due to global coal demand. earlier, you heard susie's interview with verizon's president as it rolls out its iphone strategy. verizon and at&t were the biggest drags on the dow industrials, dropping 1.5% each. apple dropped a fraction, but not before hitting a new high this morning. but leading the telecom sector lower was one of the wireless carriers left out of the iphone business-- sprint. shares fell 4%. this is a 30-session chart. anticipation had been building sprint saw a solid end of last year. a mixed outlook from retailers. sears rallied 6% after raising its fourth quarter outlook.
talbots, though, shed 17% to a new 52-week low. it warned of a disappointing fourth quarter. and discount store tuesday morning fell 16% as quarterly same store sales dropped. the sell-offs in both talbots and tuesday morning came on seven times average volume. it was upbeat guidance for communications software maker interactive intelligence. that fueled this 24% move. this is a ten-year high tonight. the jump in october was the last time it boosted its outlook. grocery story supervalu was the worst performer of the s&p 500 today, falling 11%. this is a 25-year low. it reported disappointing earnings, guidance, weaker sales and margins. the calm before the storm tomorrow with no major corporate earnings on the calendar. that's tonight's "market focus."
>> susie: for the first time in its 142-year history, goldman sachs will tell all about how much money it makes trading with its own cash. that's one of many changes resulting from months of corporate soul-searching. the investment firm is trying to repair its tarnished image after settling fraud charges with federal regulators. erika miller looks at the changes, and whether more banks will follow goldman. >> reporter: in the 63-page report, there are over 70 references to "reputation." morningstar analyst michael wong says the goal is to mend the firm's image. >> very early on in the report, goldman says its franchise or
it's assets are basically three things-- its people, its capital, and its reputation, with reputation being the hardest to earn back if its ever diminished. >> reporter: the highlight is goldman's pledge to be more open about how it makes its money. the firm will also provide more details on risk management, improve internal compliance, and avoid conflicts of interest. but the document does not say much about how goldman's day-to- day business will change. and judging by the small drop in the stock price today, the new transparency doesn't seem to make much difference to investors. >> unless you see the analysts increase their e.p.s. and price target over the next couple of days, this really doesn't look to be a material value-creating report for the company and material organizational changes. >> reporter: the recommendations kick in a week from wednesday, when the bank releases fourth quarter earnings don't expect similar changes at rival firms. >> goldman sachs was definitely the target of increased scrutiny over the last couple of years. the other large banks may be able to skate by without having
to improve their disclosures. >> reporter: the report is noteworthy not just for it's words, but for its humble tone. it's part of what the company calls a "big soul search" in the wake of criticism for a culture of arrogance and secrecy. erika miller, "nightly business report," new york. >> tom: here's what we're watching for tomorrow: we'll see what's going on in the economy around the country with the fed's beige book. and we'll get import prices for december. mario gabielli, chairman of gamco, joins us with his outlook for the year. and with health care changes on the horizon, we'll get perspective from a medical provider, the c.e.o. of universal health services. >> susie: prepare to pay more for airfare. many airlines have raised prices again. the increases on domestic routes range from $4 to $10 per roundtrip ticket, depending on the flight. the reasons-- rising oil prices and increased competition.
according to farecompare.com, southwest airlines kicked off the latest price hikes, raising rates across most of its routes. delta, american and united airlines have all matched the higher fares. >> tom: myspace laid off nearly 500 employees today, almost half of its staff. the cuts were company-wide, as the former social networking giant continues to lose ground to facebook. parent company news corp is disappointed with myspace's performance, leading many people to believe it could sell the site. myspace was retooled in october to focus on entertainment, and says it no longer tries to compete head-on with facebook. euu
>> susie: the auto industry is gearing up for a big year of sales, and it thinks it has the goods to do it. at the north american international auto show in detroit this week, there are about 700 vehicles on display. some are concepts, some are updates of existing models. to get a closer look, diane eastabrook walked the show floor with jeremy anwill. he's the c.e.o. of auto web site edmunds.com, and he pointed out some likely hits and misses. >> well, this is an interesting vehicle. this is the mini, and it's actually not so mini as the old mini. lot of space. it delivers all wheel drive, a
lot of space. it looks kind of fun and funky, like the original mini. and if you look at them side by side, you'd be surprised to see that it's quite a bit bigger. there's a nice little handle there. so, this isn't huge, but compared to the original mini, it's quite practical. so, you can actually put groceries in there without having to push down the back seats. mercedes makes me feel old, because i look at the styling and i think they are trying to reach people younger than me. this is a car that is all about style. this is the new mercedes cls. the original version of this was very elegant, very simple lines. this one's gotten a little more complex. they want to become relevant to new buyers, and this is where styling really plays a role, because it's really designed to appeal to people, frankly, younger than me. >> reporter: jeremy, do companies like this risk alienating a very lucrative segment of the market? >> well, that's always the risk. the question is how do you maintain a connection to your established customer base, and still reach out to perhaps younger buyers and, frankly, the difficulty is the younger buyers don't want anything to do with
the older generation. and now we have the new verano. some of the most interesting things about the verano are things you can't see. g.m.'s spent a lot of time, a lot of money emphasizing the harshness, taking out the vibration. what we're looking at here is a very nice two-tone interior. g.m. has put a lot of emphasis on interior over the last few years, and it's starting to show. >> reporter: is this a hit, do you think? >> i think they are going to do pretty well with it. pricing is going to start in the low 20,000s. nicely equipped in the low 30,000s range. so, if we head over here, we'll see what is the new volkswagen passat. i think this car has a handsome look to it. it has a very angular design. the current passat is in the upper $20,000 range. this one is going to start around $20,000. so, that's raising a lot of questions-- how did they lower the price that much? did they pull out content to hit that lower price point? we don't know that yet. this is one of those stories
where, for some people, they really represent german engineering. and what they're trying to do with this vehicle is still capture the essence of german engineering, but make it affordable for everyone, and that's kind of a tough balance to pull off. >> reporter: do you think this is going to be a better year for the auto industry? >> it's shaping up to be. so, last year, we sold about 11.5 million vehicles, which was up from the pervious year. what' s remarkable is that car companies are making money at that level. where car companies are today is really remarkable, because they've been able to squeeze down costs. there are new relationships with labor. it actually seems they are in a much healthier place, and they are and they wouldn't have gotten here had they not gone through that pain. >> susie: that's "nightly business report" for tuesday, january 11. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: